Jerry - what you say might explain deflation in Greece, but how does it explain youth unemployment being so much greater? Your comment is a non sequitur.

The logic is simple, but I will explain it anyway. When labor regulations force an employer to pay a high minimum wage for an untested worker they can not fire, they will favor experienced older workers over younger inexperienced ones. What is more, if non-performing older workers can not be fired, fewer openings will be available for new workers of any age.

If you read this blog, then you should know that the federal reserve exists for many reasons, but they all revolve around the political expediency of debasing the currency.

Jerry, that is a monetaryist or Keynesian view; an Austrian would beg to differ. In a sense national control over the money supply (instead of market-based control) is a prime cause of malinvestment and the boom-bust cycle, when central banks keep interest rates artificially low and irresponsibly lend to capital-destroying institutions like governments. In another sense, and perhaps this is what you meant, the regulated economy of Greece may be disadvantaged by having its money controlled by distant institutions of the EU instead of by a state closer to home.

I have no idea what it's like to be young and living in Greece right now. There is a possibility that the extremely high youth unemployment rate is an indicator, at least in part, of a growing unregulated free market in Greece. That may be just wishful thinking, but it would be interesting to know more.

LOL, yes, deflation is the cause, because all we have to do is inflate enough and everybody will be hired. It's got nothing to do with government promising far more than it's economy can deliver. Nothing. At. All.